Ballot initiative in 2016 could help community institutions

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The Service Employees International Union is pushing a ballot initiative that would divert millions of dollars from Partners HealthCare to lower-paid competitors in an effort to boost community hospitals and preserve union jobs.

Payments to hospitals vary widely under the contracts they strike with health insurers, and larger health systems, which provide a range of specialized services, can use their market power to extract higher payments.

The ballot initiative, backed by SEIU’s Local 1199, seeks to regulate insurance contracts so that hospitals could not get paid more than 20 percent above the state average. The measure also would increase payments to many hospitals by prohibiting contracts that pay hospitals significantly less than the average.

The proposal is aimed at Boston-based Partners HealthCare, the state’s largest and most expensive health system, and South Shore Hospital of Weymouth, a big and high-cost community hospital that Partners tried to acquire. Under the measure, annual insurance payments would decline $438 million to Partners hospitals and $17 million to South Shore Hospital.

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Some of that money would go to other hospitals, and some would be returned to consumers through lower insurance premiums.

The union will submit the measure Wednesday as a question for the 2016 statewide election ballot. If the measure is certified by the attorney general’s office, the union must gather thousands of signatures to put the question on the ballot.

The union said the goal is to level the playing field for community hospitals, many of which are struggling to stay viable with insurance payments far below those received by Partners’ top teaching hospitals, Brigham and Women’s and Massachusetts General. The SEIU is pushing legislation that would make the same changes.

“The current system is really creating a crisis for community hospitals,” said Tim Foley, vice president of politics and legislation for Local 1199, which represents 52,000 workers. “Health care workers are concerned about the current inequities.”

Partners includes some of the country’s most renowned hospitals, as well as the most expensive. The union’s proposal would take $254 million in commercial insurance payments away from Mass. General and $184 million from the Brigham. The proposal would boost payments to many other hospitals, including $27 million to Lowell General Hospital, $23 million to Cambridge Health Alliance, and $21 million to Steward Health Care System’s community hospitals.

Partners and South Shore Hospital declined to comment.

Dr. Howard Grant, chief executive of Lahey Health of Burlington, which stands to gain $10 million from the proposal, backs the measure but said the law should be changed by the Legislature, not through a ballot question.

In a statement, Steward said price disparities are “a crisis in many of the communities that we serve,” but stopped short of backing legislation.

Steve Walsh, executive director of the Massachusetts Council of Community Hospitals, said payment inequity is a serious problem, but he prefers a solution “that doesn’t pit provider against provider.”

The Massachusetts Association of Health Plans, which represents health insurers, has not taken a position.

‘The current system is really creating a crisis for community hospitals.’ --Tim Foley, SEIU Local 1199

The Massachusetts Hospital Association, the main trade group for hospitals, opposes the proposal.

The state passed a law in 2012 that limits annual increases in medical spending statewide to 3.6 percent.

“The idea that after we just debated [the law], to take something as complicated as this and have it decided by a political campaign does not seem like a wise idea,” said Timothy F. Gens, the group’s executive vice president.